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POLITICO 44

COPENHAGEN — Pacific Gas & Electric resigned from the Chamber of Commerce in September to protest the business lobby's position on climate change. Now executives from the California-based utilty — a member of the U.S. Climate Action Partnership — are in Copenhagen pushing for a global climate deal.

POLITICO talked to Brian Hertzog, director of the company's corporate affairs, about what the utility hopes to accomplish at the U.N. climate conference and beyond.

What would PG&E like to see come out of the Copenhagen talks?

A commitment by major emitting economies and developing countries to continue on a path forward to developing an international agreement.

How did PG&E first get involved in the climate change issue?

Our engagement on the issue stretches back at least 10-plus years. We stepped up that engagement considerably since 2005. At that time, a new senior executive team took a fresh look at the issue. The science clearly indicated that climate change is a pressing challenge. We saw the need and opportunity for leadership to develop an economically and environmentally workable policy response. And we became one of the first major companies in the country to call for climate regulation publicly.

What opportunities does PG&E see in a carbon-constrained world?

As a regulated utility, the principle driver for growth in our business is new capital investment in infrastructure and technology, on which we earn a set return. The opportunities in a carbon constrained world will grow out of the need to invest in cleaner, more efficient sources of energy, the need to build infrastructure that enables us to bring that energy to the customer, and the need for technologies that can empower customers to use energy more efficiently.

PG&E helped found the U.S. Climate Action Partnership and has been a vocal advocate for a cap and trade system. Why is a carbon cap so important to PG&E?

Cap and trade is the most cost effective way to achieve the emissions reduction goals that need to be hit. The sooner the nation puts a clear strategy in place to address this issue, the easier it will be for businesses like ours to begin making smart long-term investments. Without that kind of clarity, many companies in our industry - and other industries - will hold back investments. That's exactly the opposite of what America's economy needs today.

What has the response been from other utility executives to PG&E's call for a carbon cap?

The utility industry has come together on this issue in ways that even a few years ago would have seemed improbable. Companies have come to appreciate the importance and the value of creating a clear path forward. We believe the issue can be addressed in ways that protect our customers. And we've worked very constructively with each other and with policymakers to advocate for this approach. As a result, the industry's support has been a key element in moving the process forward.

How important to PG&E's future is an international treaty capping carbon?

As a company with no international operations, our focus has been on domestic legislation. Also, as a result of California's clean energy and climate policies, PG&E will be moving forward to lower emissions and make new investments regardless of what happens. That said, it's clear that addressing the problem of global warming will require other countries to act. It's also clear that economically it's important that the playing field be as even as possible. So, we would welcome and be encouraged to see progress toward an international agreement.